alcoholic beverage law

Can Washington breweries have minors on the premises? What does a brewery need to do?

If a Washington brewery wants minors on the premises, what does it need to do?

The question comes up quite a bit. Can families spend time at a brewery? We’ve seen kids at breweries, but is it legal? Can we get into trouble? As the law and regulations stand right now, the answer is fairly straightforward.

First things first. Federal laws and regulations don’t have a say. So, we don’t need to worry about the Alcohol Tobacco Tax & Trade Bureau (TTB) when thinking about minors on a brewery premises. TTB cares about the premises layout, a lot. But they don’t dictate who comes onto it.

The state perspective, however, does matter. Here in Washington, we have the Revised Code of Washington (RCW) which includes law created by our legislators. We also have the Washington Administrative Code (WAC) which includes regulations. The Washington State Liquor and Cannabis Board (LCB, formerly the Washington State Liquor Control Board) is the regulatory agency that creates the relevant regulations for the alcoholic beverage industry here.

Between the RCW and WAC, here’s what we have. The base license to operate a brewery in Washington State is the Microbrewery License or the Domestic Brewery license, depending on your volume of production. For most reading this, the Microbrewery license applies (60,000 bbl annually).

The base license is treated as a non-retail license. That is, licensees—those who have the licensee—are not treated like “retailers.” This is the case, even though we all know breweries in Washington are allowed to sell beer at retail, just like retailers.

Importantly, though, there is no age restriction imposed at a non-retail premises. Therefore, when a Washington brewery uses its built-in retail rights—under its “non-retail license”—the Washington brewery can allow families and minors on the premises. Of course, the brewery can’t serve alcohol to those minors. And best practice would be to have prepackaged snacks available.

Can a brewery obtain a retail license to supplement its non-retail rights? Yes. But at the location licensed with the retail license, the brewery is subject to food minimums or age restrictions. Retail licensees do have additional obligations to have minors on the premises.

We’ll touch on why a brewery might want a retail license in our next post. As it stands, though, a Washington brewery can have minors on the premises—without burdensome or, truly, any food requirements—so long as the brewery is using its built-in rights to retail beer.

Recently signed Washington Bill, H.B. 1342 gives a big hug to the beer and cider industry, allowing microbrewery sales of cider for consumption and to go, starting in late July 2015.

Edit (5/9/2015):You all are astute readers, and it’s awesome. Thanks to a comment I received via email from one such reader, it appears there *has* been a tweak to the 25% rule. Although, it seems to be more of a sensical one to help keep taproom managers from breaking out calculators. I’m grateful for the note; and in my laser-like focus on the cider stuff, I didn’t cover this nuanced tweak. See my strikethroughs and underlined additions below; and I’ll be making a new post specific to this change where I also will point out some wonderfully inconsistent quirks in the bill. Look for that in the next day or so. -DT

Guest taps are a great thing. But, what about a cider guest tap in a State of Washington taproom? Can a Washington brewery sell cider? The reality right now is no (but if you can wait until July, I’ll have a different answer…read on).

Today, a brewery cannot legally have cider guest taps unless that Washington brewery is also a restaurant meeting certain food minimums (and even then you need a proper endorsement). This has been a bummer for cider fans of course, and also those needing and seeking to avoid gluten in their diets. It’s also kept beer and cider producers, who share a similar ethos, from doing a bit of teamwork to get presence in the marketplace. Of course, it’s also been an untapped revenue stream for both sides.

In any event, I have some good news for you. This legislative session, we saw House Bill 1342 introduced, which aimed to remedy just that. Thanks to our craft-savvy government, H.B. 1342 swiftly moved through the House and Senate and was recently signed by the Governor. H.B. 1342 not only permits cider guest taps, but it also allows sales for off-premises consumption. So, whether by the glass, growler, or packaged to go, cider has the forthcoming green light at Washington breweries, now with no extra regulatory or food-prep fuss.

When can you expect cider to (legally) pour at Washington breweries? The effective date is July 24, 2015.

What Changed About the 25% Rule (Added 5/9/2015)

If you recall my first post on the 25% rule, you’ll remember that it was a weird rule. Under it, guest taps couldn’t exceed 25% of a brewery’s own on-tap offerings. It sounds great in theory, but the technical wording is actually annoying to apply. To make numbers easy, say you have 100 beers on tap. You could have 25 additional guest taps. Why? Because you have 100, you can have 25 guest taps (for 125 totals taps) because the additional 25 is no more than 25% of your own brands. As you can see, the law was confusing. So confusing, it’s hard to write out here. It would make a lot of sense if you could just count the taps, and not commit more than 25% of those taps to guests. For example, have 100 taps? Great, you can have 25 of them as guests—and that’s what I believe House Bill 1342 has done, even if it perhaps wasn’t its main intent.

Here’s the relevant part of H.B. 1342 with respect to this point:

(3) Any microbrewery licensed under this section may also sell from its premises for on-premises and off-premises consumption:

(a) Beer produced by another microbrewery or a domestic brewery ((for on and off-premises consumption from its premises)) as long as the other breweries’ brands do not exceed twenty-five percent of the microbrewery’s on-tap ((offerings of its own brands))offerings; or

(b) Cider produced by a domestic winery.

So, what’s up with these changes? A couple of things. First, it becomes notable that if you have cider on tap, it’s a part of your “on-tap offerings”, so having cider on tap becomes part of your offerings for the purposes of your 25% calculation. Maybe that’s the only thing the law was written to do. I’d like to believe, though, that it was also intended to eliminate the weird calculation problem above. Even if not, it appears to do so. Read the excerpt again. You can sell beer produced by another brewery, as long as guest taps don’t exceed 25% of your on-tap offerings. You can’t commit more than 25% of your total tap share to brewery guests. Interestingly, though, the law doesn’t say split about restricting your cider offerings. I’ll report separately about that (as well as another implication about the 25% rule I’d like to note…so stay tuned if you’re into this stuff).

Whatever the case, House Bill 1342 is a bit of a win for anyone who (1) doesn’t want to break out the calculator to compliantly allocate guest taps and (2) wants to allocate a bit more to guest taps. Let’s apply it. Under the new law, it seems that if you have 100 taps, 25% can be guests. So, 75 of them must be your beer or ciders, and then 25 can feature your favorite third-party breweries. Compare this to the old setup. Let’s say you had 75 of your own beers on tap. The old law said guests couldn’t exceed 25% of that. We know that 25% of that is 18.75. So, they compare this way:

Compliant Under New Law: 75 house taps or cider taps, up to 25 guest taps.

Compliant Under Old Law: 75 house taps, 18 guest taps.

Clear as mud? I’ll follow up soon to cover this, and a few other notable notes.

Last, bear in mind that H.B. 1342 also was specifically focused on getting cider flowing, and did nothing (but pave the way for the bright craft future) to get wine flowing at a non-restaurant microbrewery with a proper wine endorsement. In any event, it still counts as another win for the Washington beer industry, and our kindred cider-producing spirits. Though, speaking of spirits…well, we’ll leave that for another day. Here’s a link to the passed bill.

To all of the wonderful readers on the Brewery Law – thanks. The overwhelming amount of response I have had from brewers around the country has been humbling. I promise to keep on with the blog. It’s been a blast.

In the meantime, I wanted to do something I normally do not: Talk to other lawyers. In my on-going quest to ensure that every brewer has adequate and cost-effective counsel, regardless of location, I am making a call out to lawyers in other jurisdictions. Please introduce yourselves! I am regularly contacted by brewers that I cannot assist due to jurisdictional restraints. And as we all know, there is a serious gaping hole where the Alcoholic Beverage Law community should be.

Before you even get to the USPTO – there are a number of things you can do to preserve your brand.

Many brewers think that their brand is an afterthought. Others believe it is the end-all-be-all to their success. Well, there is no doubt that a brewer’s brand is incredibly valuable. The logo, design, and copy on the packaging all require attention – early on.

So I am often asked by brewers to tell them when they need to go about protecting their name and logo. The answer: yesterday. The craft brewing industry has become swollen. There is a massive group of potential branding competitors and you do not want your brand to become confused with another. Therefore, you need to be proactive and take some steps to ensure that your brand stays yours, and yours only.

Even before you get to brewing commercially, you should focus in on a theme that represents what you make as a brewer. The theme will help you easily craft a name and logo that fit your motif. Once you hammer it down and work with an artist to put your vision on display – it’s time to be proactive and protect it.

Before you speak to an attorney, you could do the following:

Search TESS, the federal trademark registry. Look for other “beer” related brands that might be confusingly similar to your own name.

Search COLAS public, the federal label registry. Look for other labels and brands that are on the market with a similar name – heck even a specific beer with your brewery’s name would be potentially a threat.

Check for available Domain Names. Go to your favorite online domain provider (GoDaddy, 1&1, etc) and search for your name and similar variations (i.e., if you pick Little Bear – look for Small Bear, Tiny Bear, etc)

Check for social media availability. Go to Facebook and Twitter and make sure someone else is not using your handle for a branding purpose.

Once you have satisfied yourself that you have a brand — call your counsel and file your trademark. Under federal trademark laws, you have the ability to file on the basis of “intent to use,” meaning that you are not required to prove to the US Patent & Trademark Office that you are currently using the mark in interstate commerce. Instead, you get some time to get the brewhouse in place, fire up the kettles and begin making beer.

A federal trademark registration is the best way to inform the general public that you intend to use this brand. You can file a mark for either your name alone, your logo alone, or a combination of the two – so there is little reason to delay.

Be proactive and protect your brand early on. It’s simple, efficient and effective. Then, get back to brewing.

Looking for more beverage law across the web? Me too. The ABA 100 Blawg Amici is up for votes right now, and I can assure you that you are likely to see a glaring omission from the representatives in beverage law. Here are a few of my favorites though, if you are looking to add to your Google Reader list:

The blog is written by a collective of attorney out of the firms offices in Washington, Oregon and California. Seattle attorney, Susan Johnson, offers her own perspective from time to time, including a bevy of discussion on the liquor Initiatives (1100 & 1105) that hit the ballots in Washington over the past two years..

BevLog

Probably the first blog I ever started reading. BevLog is a collection of commentary on label submissions from around the country, as well as the TTB regulations that you and I both know very well. Written by Robert Lehrman and his team at Lehrman Beverage Law in Virginia, it has become my personal favorite.

Booze Rules Blog

Hinman & Carmichael are a staple in alcoholic beverage law. This California firm represents some serious clients and has excellent commentary on new laws, and old. The firm’s Booze Rules Blog is relatively new, but I hope that the postings pick up.

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